this is a fox urgent.

talks hitting a wall in washington. an entire nation stairs off the edge of the fiscal cliff, dumping you the back into a recession. we're just learning of a major snag in negotiations on the hill. bringing lawmakers back where we were 24 hours ago and bringing us closer to higher taxes on just about every worker in america and deep spending cuts, particularly to our military. i'm hair harris faulkner. this is a special two-hour edition of the fox report. pressure is mounting as talks appeared to be making progress at one point then late today, word they hit a setback this afternoon over social security spending. senate minority leader mitch mcconnell says he never received a response to a republican offer last night and is reaching out to vice president joe biden to kickstart negotiations with the white house at this point. the senator saying fail to go

solved the crisis is simply not an option. >> the consequences of this are too high for american people to be engaged in a political messaging campaign. there's no single issue that remains an impossible sticking point. the sticking point appears to be a willingness and interest or frankly the courage to close the deal. i want everyone to know i'm willing to get this done. but i need a dance partner. >> a dance partner. meanwhile democrats being led by senate majority leader harry reid who says he's cautiously optimistic about reaching a deal but warns there's not much more negotiating that can be done on his end. >> i don't have a counter offer to make. perhaps the day wears on, i will ble to. i will say that i think that the republican leader has shown good faith.

it's just we're apart on pretty big issues. >> that was earlier. let's get the latest now because it's changing minute-by-minute. mike emanuel kicks off our fox team coverage live from washington. harry reid said negotiations continue. where do we stand? >> senator reid seemed to be looking ahead to tomorrow's schedule. talks continue but a deal is not implement. another said there's a chance one could be reached tonight. harry reid and mitch mcconnell are the key players. he sounded frustrated after not receiving a counter-offer. a key member of the leadership team offered this update. >> offeringses and discussions between and we remain hopeful that will get a breakthrough. obviously what happened here between the two leaders in the senate had broken down because

the senate democrats failed to come forward with a counter offer to the proposal the republicans made last night. hopefully the discussions between the.and senator mcconnell will get us on track. >> republican aides recognize the consequences if it falls apart. everybody gets a tax increase in 48 hours. >> well, it's less than 48 hours now. i'm wonder, are the democrats fighting among themself? >> there's a battle over social security. republicans are including a new way of calculating inflation to lower payments to recipients of social security. democrats had could consider it if it's part of a $4 trillion package. now republicans say it's off the table and key democrats are hopeful senate leaders will get this done. >> there's no reason on this beautiful, god's green earth why we can't get a deal here if

everyone is sincere in saying they want the middle class to be protected. president obama says 250,000, maybe i think 350,000 is the line. maybe someone else, 500,000, maybe someone else, 150. we can meet somewhere. >> that threshold is a big issue, how high do you extend the tax cuts. tom harkin says they offered keeping it 460,000 for couples. we have watched the timetable kind of slide forward and backward today. a 1:00 deadline, three 3:00, then 6:30 and then 4:00. are you hearing anything about a timeline tonight? >> hearing the senate majority leader talking about tomorrow's schedule, coming back at

11:00 a.m., that seems to be punting into tomorrow and certainly things can move quickly when there's a deal but the question is, will there be a deal. >> mike emanuel, we'll bring you back as news warrants. we want to go to the white house where president obama is keeping a eye on capitol hill. the president making his case and pressing lawmakers to reach a deal. when asked about the fiscal cliff in an interview today. ed henry is live from the white house. the president seemed to be aggressively pushing his message. >> he was. he's been briefed through the day by his staff. he's been at the white house behind closed doors, awaiting the latest. all those developments mike's talking about but he decided also to take an aggressive role in going on a sunday talk show for the first time in over three years, meet the press, and made his case by suggesting this is in republican hands now.

if they do not move forward on a deal, the g.o.p. will get the blame for going off the cliff. >> one of the proposals we made was chain cpi which sounds technical but makes an adjustment in terms of how inflation a calculated on social security. high will highly unpopular among democrats but in pursuit of strengthening social security long term i'm willing to make those decisions. >> the president talking in the broader contest of if there's a $4 trillion debt deal he would put social security on the table. but the white house is saying he was not suggesting that you should cut social security benefits essentially in these conversation when here at this late hour dealing at this last minute with such a small deal. >> observing all this, it seems we're saying more points made in front of the cameras than each other. it's hard to believe we're

learning so much from sound bites at this point that we've come to this point on the calendar. republicans are trying to make this point today, that it isn't just about taxes but spending cuts. >> that's right. half of the fiscal cliff is the fact that the bush tax rates are expiring midnight tonight. we've focused on that, whose taxes are going up, is it $250,000, or $400,000. the sequester, the spending cuts to the pentagon and elsewhere kick in. the bottom line is when you talk to republican senators they say the issue is not taxes, it's if you give the president more revenue he'll spend it on more government programs. >> senator harry reid should have made sure the senate passed a budget sometime in the last three years and it would be reconciled with the house and you would have a framework, a budget resolution. the fact we're down to the 59th minute of the 11th-hour

and a couple elected officials and unelected staffs behind closed doors doing a back room deal is an outrage. >> in the final moments, a key development is that vice president joe biden has been in delaware for the weekend. he came back a few hours ago and is huddled behind closed doors, two phone calls with mitch mcconnell. a year and a half ago, it looked like all hope was lost and vice president with his long time in the senate many years was able to reach out to mitch mcconnell and they pulled a deal together in the final hours. >> the 59th minute of the 11th hour. ed henry, thank you very much. going over the cliff would affect nearly every american from smaller paychecks thanks to higher taxes to the sudden end of unemployment. there are some things you really need to know about. i'm joined by gerri willis,

anchor of the willis report on the "fox business" network. break it down for everybody. happens when we hit midnight on tuesday? >> the big fear and threat is that this political impasse turns into a economic mess and here's why. everybody is forecasting recession. if we can't find some resolution, businesses stop spending, people stop getting hired and here's what happens. we could lose as many as $10 million jobs. gdp could drop of%. we could have a 2% increase in unemployment. the stakes couldn't be bigger in terms of the economy. >> you know, you heard about the politics of this very early on but that sounds neutra, like if we don't get a deal, everybody feels this. so there's a big chunk of money that's basically going to be taken out of the economy. what is that number? >> exactly. $600 billion. that's the tsunami, the wave of

money that will hit the economy. $440 billion in tax increases. what are those tax increases? bush tax cuts expire at midnight tomorrow night and you'll wake up the next morning and face a higher tax rate unless congress acts. there's also a possibility of a $108 billion in spending cuts. this is largely the defense department as we talked about and also money that ends up in people's pockets. there's an economic impact. >> i misspoke, i said tuesday at midnight. tomorrow at midnight. >> yes, december 31. >> the money is personal for people. you start to talk about budging a household. for the average family? >> 3500 bucks is the income tax hit. >> above what they're paying. >> and additional 3500 for median income. that goes up dramatically the wealthier you are. tens of thousands of dollars

more. you could on the hook for a real hit. >> the argument is the wealthy won't feel it but they won't spend it either. >> that's the point. a lot of those people paying higher taxes own small businesses and will opt not to hire and it will ripple through the economy. >> it hurts when i hear you say job losses because we have so many millions out of work. people don't want to talk about money. some have tuned out of the process, they're starting to tune in because they go back to work after the holiday and they're wondering what the checks will look like. what do you want them to know? >> watch out for withholding. you'll get hit in the first paycheck. social security withholding a changing right away. it will be lower than it was before the end of the year and it will hit everybody whose working. planning ahead, make sure you have savings set aside for the higher tax rates. it's a big hit. people are going to be knocked

on their keister and i think you're right, harris. people haven't tuned in. they've been busy with holidays, they've had family to think about and only now do they turn their attention to it. >> and they've built up their debt over the holidays. is there anything good economically about going over the cliff? >> that's a question i cannot answer in the affirmative. there's one potential issue that could come out of this. that's that everybody realizes just how important and how big the government spending problems are, the fact we're overspending. we spend more than we take in. as an individual, you can't keep that up. well, you can't keep it up as a government either. >> gerri willis, thank you so much. >> absolutely. >> this has been moving and fluid all day. >> catch her weeknights onhe willis report 6:00 p.m. eastern on the "fbn." right now, work behind the scenes to get to a deal in

place. we'll take you back to capitol hill for the latest developments. you're watching a special two-hour edition of the fox report. [ sniffs ] i have a cold. [ sniffs ] i took dayquil but my nose is still runny. [ male announcer ] truth is, dayquil doesn't treat that. really? [ male announcer ] alka-seltzer plus fights your worst cold symptoms, plus it relieves your runny nose. [ breathes deeply ] awesome. [ male announcer ] yes, it is. that's the cold truth!

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what are the key differences keeping lawmakers from reaching an agreement to avoid going over the fiscal cliff? 0 we'll take a live look at the senate floor. as we reported before the commercial break, senate

majority leader harry reid says no fiscal cliff vote planned for tonight because the democrats have not been able to come up with a counter offer. they're arguing amongst themself, the senate plans to be back at 11:00 a.m. eastern tomorrow morning. but they're still in their offices with their staff. they're tending to other business we're told while we wait. we want to bring in susan, the chief congressional correspondent for the washington examiner. we've heard -- first, what do the republicans want? >> they'd like a bill that keeps taxes low for all income earners. they're not going to to go that to they want to keep the threshold as high as possible. president obama initially suggested $250,000 or above should see an increase. that number will probably be

maybe 400,000, 500 thousands, but republicans want to see spending cuts. today they talked about changing the way social security benefits would be administered over time and save money, entitlement reform. that's off the table so republicans are saying where are we going off spending cuts? there's a hangup there. democrats on the other hand looking for a way to keep taxes for high for the higher income earners. instead of $400,000 they would like to lower that to $250,000 or above, so there's a sticking point on taxes and spending. but as you said, all eyes should be on the senate. the senate needs to pass a bill and it's run by democrats. they're really fighting amongst themself now to agree on a measure they can pass. literally by tomorrow, by new year's eve, in order to send something to the house in time

to avert the fiscal cliff. >> you're the expert on this. you work on the hill every day. procedurally we've gotten past the point to get anything passed by the first and get it through the process it needs to go through. so we're looking at the middle of the week, aren't we? >> there's a possibility that if both sides agree solidly on a deal, they could pass it quickly. when we fought out of debt ceiling increase in the summer of 2011, at the 11th-hour they got something together and we went a little bit over the edge there, over the time limit, but it was okay. a lot of times in these situations, things can be fixed retro actively. the fiscal cliff is thought to be connected with real economic disaster if it goes on, raising unemployment past 9% and sending the economy into a tailspin. if they get things done by the

middle of next week it won't have a major impact but they need to show the american public they can get this agreed upon. >> in good faith. >> or they'll rattle the markets. tomorrow's the day to keep your eye on the senate. they have to pass something. senator reid will feel a sense of responsibility to get something done. >> we'll bring you back this hour. i appreciate it. you gave us a nugget that some of this could be retro actively picks -- fixed. >> all this talk about what will happen in the nation goes over the cliff. we'll talk about how it could affect your paycheck in particular. the capital one cash rewards card gives you 1% cash back on all purchases, plus a 50% annual bonus. and everyone...but her likes 50% more cash. but i'm upping my game. do you want a candy cane? yes!

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we were going to take a live look at the capitol hill where the people we elected to get this job done are inside their offices. staff level people, our leaders, everybody. and you know, these are the people that we're trust to go bring us back from the brink. remember how you feel about these people. fox news opinion poll shows a -- a new one, 17% of you say you approve the job congress is doing, 74% disapprove. 9% don't know. theories the people we trust -- these are the people we trust to save the economy. before the commercial, we got a ray of sunshine. if we fall off the cliff and they're negotiating in good faith, maybe they can fix the damage next week but we'll are already giving our government more money. joining me, peter morrisy and

former chief economist for the united states international trade commission. good to see you. >> nice to be are you. >> washington tends to be greedy, so if we go off the cliff, retroactively will we get the money back? >> we'll get some back but the notion we can put it back together, no matter what we do, we're in for a hard time. if we go off the cliff, we have a recession. the deal is raising taxes on upper income folk and increasing spending, it isn't going to take long for small business to realize they don't have much money to invest and create jobs and will have damaging affects. i would rather go over the cliff and force the president to really cut spending to get the middle class tax cuts he so badly wants. >> i want to take a look at what senator graham said on "fox news

sunday," talking about how sad this is for the country that we have gotten to this point. take a watch then i have a question for you. >> okay. i think they are trying to get that ready for us, peter. one of the things that the people have been saying is we're turning into europe. that we'll be over taxed and people that can spend and create jobs in this country aren't going to want to. they won't have the liquidity and won't have the will because they'll want their own things to continue. let's see if we can watch senator graham. >> the sad news for the country is we've accomplished very little in terms of not becoming greece. it's a victory for the president and i hope we have the courage of our convictions to fight for what we believe as republicans. >> peter, what the senator is saying is this doesn't really solve the problem of the debt

we're building up. >> no, it doesn't. we have all heard taxing high income individuals more would only raise 5% of the deficit. another statistics that will break your eyes. if we raised everybody's income tax by 50%, we'd likely only cut the deficit in half. that should explain to everyone why it is imperative we finally do something about rapidly escalating entitlement cost but the president refuses to come to the table. nothing is fixed in my mind more than speaker boehner saying i've offered you 800 billion in additional revenue. what do i get in return? and the president said nothing. you also counted he won the election. i have got news, whether he won the election or not,let stats about the budget are neutral and nonpartisan and mr. boehner's republicans won an election too.

he was elected president, not prime minister. he can't dictate to the house the way he would in england. >> as we look forward here, i heard you mention the debt commission and that's come up a couple times, that we've been down this road before with congress kind of bringing us to the brink but they always do a back deal. that has a longer lasting effect on the economy because every time we go through this, the markets react. people pull back. talk to me a little bit about what's forecasted for tuesday? we're get to hit the debt ceiling. >> a perfect storm. >> yes, but maybe it's one we need to endure so we can straighten our country out. if we go along with the president we have to reckon with the fact entitlement spending, about $650 billion or so, between now and the end of the decade, it will be up over a trillion per year. so we are really headed for a greek situation.

by giving the president his way tonight, republicans will be bequeathing to his successor the kind of mess the greek president and italian prime minister are endure. it's irresponsible to make this deal. it would be political by costly for congressman boehner to say it's not passing the house, but it would be more irresponsible and a terrible sin against history and the future of the american people to give this president his irresponsible way. >> wow, those are tough words tonight. peter, thank you for being with us. as i have said to everybody, because we're in a fluid situation, we'll bring you back as things change. we're awaiting an update from capitol hill from lawmakers on movement in their talks. we're live from there and we'll bring you the latest as soon as the news breaks. and what effect will there be on

our military if lawmakers don't reach a deal? retired 4 star general jack keene talks about defense cuts that are eye-popping. stay with us. you know that little 50-pound thingy at the doctor's office when they weigh you, and they have to move it over? my doctor does not have to do that anymore. [ male announcer ] for every 2 pounds you lose through diet and exercise alli can help you lose one more by blocking some of the fat you eat. feels great. simple. effective. take that, 50 pound thingy. let's fight fat with alli. have a healthier holiday at letsfightholidayfat.com.

i'm harris faulkner. this is the "fox report." it's the bottom of the hour, time for the top of the news of this special edition. no senate vote on the fiscal cliff tonight.

that just from majority leader harry reid. they cannot agree. cannot agree on a counter offer at this point from the democrats. after a day of last minute negotiations to avoid tax hikes and spending cuts set to go into effect the day after tomorrow. chief congressional correspondent mike emanuel very busy tonight. it's almost coming apart. >> that's right. there's a lot of dis agreement on both sides. republicans say they would like to see any tax revenue that comes out of a fiscal cliff deal used to pay down our trillion dollars deficits. retiring republican senator from arizona, jon kyl, said the democrats want to spend $600 billion and he believes the new tax revenue will be about the same am. to he says not solving anything.

for from senator to an today. >> raising taxes to pay for new spending is not something republicans believe this debate ought to be about. it ought to be about reducing the deficit and debt. they're suggesting we want new taxes, higher taxes on people in this country to pay for new spending. >> republicans continue saying they're waiting for harry reid to make a counter offer. >> they're not making that tonight. he's told us that's not going to happen it but they're working on it. a sounds like a change of entitlement programs is irritating them. >> republicans created way of calculating inflation to lower payments to recipients of social security. the senate majority leader offered this update a short time ago. i was really gratified to hear republicans took their dammed for social security benefit cuts off the table. they should never have been on

the table. there's still significant distance between the sides but negotiations continue. there's still time left and we intend to continue negotiations. >> senator mitch mcconnell says there was no single issue that remains an impossible sticking point. all that's is needed he says is a willingness, interest, or courage to close the deal. >> one last question for you, i've been telling everybody people are still in the capital and sometimes you'll be able to watch back doors and side doors. has there been any change in people coming in and out? >> we've seen a lot of closed meetings, small groups trying to figure out the next move. senator reid talked about the senate reconvening tomorrow at 11:00 a.m. so presumably negotiators will work through the night with time being

critical but there's a lot of head scratching going on, wondering how to get past this impasse to a deal. >> everybody's in track suits and ball caps and all that and the pizza's going in and out so they're in for the long haul. thank you very much. a big sticking point, for people sensitive about national security and who would that person not be, the pentagon bracing for massive cuts, even if the deal is reached to avoid the looming fiscal cliff. with sequestration, it appears more an more likely the military is looking at $500 billion in cuts. that's what that fancy word means, over the next ten years. peter doocy has the latest from washington. >> reporter: harris, senator lindsey graham told me his phone rang saturday night, leon panetta saying the bill will not include anything to avoid

sequestration so tuesday secretary panetta needs to write 800,000 layoff notice to defense contractors. >> if the president doesn't deal with this, he's a lousy commander in chief. if there's a deal that doesn't set aside defense cuts, because we cut $489 billion, i'm disappointed at the president's commander in chief and the republican party for allowing this to be possible. >> sequestration is designed to be painful. a penalty congress imposed on itself last year when the super economy failed to find $1.2 trillion of cuts to live w half are those are directed at the pentagon but president obama said today said the cuts can be offset by raising taxes on the rich. >> we have raised revenue by the wealthy paying a little bit more, that would be sufficient to turn off what's called the

sequester, the automatic spending cuts and also have a better outcome for our economy long term. >> senator graham thinks it's possible to find $600 billion in cuts elsewhere to spare the defense department for the next decade but a bipartisan agreement probably can't be reached until february or march. >> thank you. joining us now more on this, the military cuts, jack keene, retired 4 star general. thank you for being with us tonight. >> glad to be here. >> how do you get the job done of protecting the country with fewer resources? >> well, it becomes difficult. we've already had a $480 billion cut that's taken place in the defense department. most experts who look closely at that cut believe there's too much risk in that. add $500 billion on top of that,

borders on irresponsibility. and it cuts into our ability to provide national security and protect the treasures of the united states. what's going to happen here, it starts with people. the active duty pay would be protected. seven pay would not. -- c would not. they'll be furloughed, kept on the books but not work for a month or two and then eventually they would have to be significant reduction in force. also, and listen to this because the capabilities of the military would be decreased so much, the services, while they have active duty pay for the people, would find themself having to separate tens of thousands of people in addition to the civilian workforce and we'll hollow out the force. as peter mentioned, there would be hundreds of thousands of defense contractors let go. >> you're talking about peter

morrisy, the economist who joined us. you give us dire circumstances. i understand even if they reach a deal on the fiscal cliff, there are already defense cuts that will hurt anyway. >> that's right. those decisions have been made. what's so disappointing about this deal being constructed here, and hopefully there is one, is the fact sequestration is not on the table. that is going to take place anyway. we look at the readiness of our forces and readiness is a word that describes the preparedness to fight effectively and that he is what americans should remember. we look at one, do we have the people, and are they qualified with the appropriate skill sets, enlisted and officer. do we have the repair parts and maintenance hours to fix the equipment that we have and then are we able to train effectively with that with the amount of hours and time needed to do

that. all of that would be cut back significantly, so the readiness of this force, its ability to fight is what i'm saying, would go down markedly. and also there's going to be significant morale impact to the force because all of the services on bases would be cut to include repair and maintenance of barracks and facility and housing, counseling services, morale welfare services. then every single base in the military, with some exceptions, has primary care facilities, mostly hospitals, some collins. all that would be cut back. that's a a kick in the teeth for a country at war. >> their families are doing so much too. people think it's the man or woman who is enlisted or the officer doing the sacrifice. no, they're extracted from their family and the families need the support on the military basis

you're describing. what you're saying is kind of shattering because you're saying that the deal that -- as you understand it that's talked about in washington right now, isn't considering sequestration. shouldn't our defense secretary be pushing right now, making phone calls and saying you guys got to talk about this before you put this to bed? >> i think he actually has been. i can't speak for him directly, but by implication, the fact that he and senator graham had a conversation, the one we're aware of but i think there were many others, and he has been, frankly, very convincing and very compelling on this issue from the beginning, educating his own political party as well as the american people at how devastating these cuts would be if sequestration hits. let's face t it's going to hit. >> you were talking about the paychecks and the immediate effect. i know that sometimes former

generals are called upon to visit the basis. my dad's a former colonel and he'll do this to lift up the morale. what would you be telling those young soldiers who are putting their lives on the line while this battle is going on in washington? it's got to be attracting for them. >> well, i think our leaders are doing that. they're talking to the troops and -- because while we're in the football season, people are preoccupied. our troops aren't immune to what is going on in the country and they pay attention. our leaders would tell them, look, our leaders will come to their senses eventually. they're probably holding out with optimism. let me just say this to be frank, the -- while sequestration will hit, it will not be a cliff. it will be a slope. secretary pan anytime -- panetta and the chiefs will try to slow down this thing so we don't get

a major impact in the first month and certainly it will begin to impact in the second month and hopefully a deal that involves sequestration. >> general jack keene, thank you so much. appreciate your time. >> take care. >> superstorm sandy caused damage to new york, new jersey, connecticut and it's up to lawmakers in the house to approve a bill covering the cost of reconstruction. they're working on this while they're working on the fiscal cliff. why this deal may not happen next.

obviously a lot of attention tonight on the fiscal cliff. we're inside 30 hours until the expiration date on tax cuts. there are other important bits of business on capitol hill before the end of the year. in other words, in the next 30 hours or so. on friday, the senate approved a

more than $60 billion bill to pay for construction costs for superstorm sandy. you see the video of that here. the house still needs to vote on that legislation. it isn't clear yet what the house is going to do. molly henneberg is live in d.c. there's a holdup in the house. what is it? >> the price tag. house republicans say it's too steep. a south carolina republican congressman said he and others want to help the people hurt by sandy but lawmakers need to figure out where the money's going to come from. >> it's not paid for. i know that's a difficult conversation to have but it's a necessary conversation. if we can't come together and figure out a way to stop spending someplace else to pay for this disaster, do we hope to be able to balance our budget and fix our spending difficulties? >> the governors of new york, new jersey and connecticut are pressing to get that money,

$60.4 billion writhing in it storm struck your subsequents and devastates it would you you say the house has done enough? the house is not schedule today vote on the legislation. >> what it likely to happen at this point? >> it's always possible the sandy aide bill could be attached to a fiscal cliff legislation or other legislation before the end of the year but john boehner, who signaled he does support some kind of sandy aide, has not decided whether or not to bring it up for a vote in this session of congress and this session ends on thursday. and if lawmakers don't get it by then, the senate bill will expire and the next congress will have to start on it all over again. >> molly, thank you, you talked with congressman mick mulvaney. we talk with him more.

>> republicans are firing back about how the grand ol' party is handling fiscal cliff negotiations. why they say the president needs to stop the blame game and start leading. fair and balanced debates when we come back. questions? anyone have occasional constipation, diarrhea, gas, bloating? yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ female announcer ] live the regular life. phillips'.

our continuing conference of the fiscal cliff in this special edition of the fox report. the saying during an interview today it's the house republicans to blocked any potential deal by refusing to accept tax hikes on the wealthiest americans. house speaker john boehner said, quote, americans elected president obama to lead, not cast blame. the president's comments to be are ironic as a theme of our negotiations was his

unwillingness to agree to anyone that requires him to stand up to his own party. brad blakeman, former deputy assistant to george w. bush, debby dingle from mish michigan to talk about us. deb y the timing of the president's interview seems a bit like taunting. was that the point or something else? >> i don't think it was taunting and i think you continue to see the president throughout the day say we've do the to try to negotiate to get ourself an answer. he has worked and worked with republicans trying to find a solution. i think everybody agrees, i pray everybody agrees, democrats and republicans alike, that not solving this and doing over the fiscal cliff is not an option. that means everybody has to give. etches stating a -- he was stating a fact and reinforced all day today he's working towards finding a solution. >> brad, are the republicans

having a sour grapes because they didn't take to the airwaves or do you think it was wise not it? >> i think it's wise not to. it's good faith to negotiate with your partners, so to speak, behind closed doors and come to an agreement and announce it when it's ready. the president negotiates and runs over and does sunday talk shows, something he hadn't done in three years, and taunts republicans and bullies them on television. that's not an act of good faith my opinion but the president appointed a bipartisan commission on debt and it was tough love for everybody. revenue, spending cuts and tackle entitlements. the president shelved it. the senate has been unable to bring a budget, not one senator would vote for the president's own budget, yet the house passed a budget. in may the house passed a

spending bill. in august, they passed a tax bill. they've created a crisis that the president himself is unwilling to solve. >> i want to share response from senate minority leader mitch mcconnell's office today. his spokesperson saying while the president was taping those discordant remarks, senator mcconnell was in the office working to bring republicans and democrats together on a solution and they continue today. debby, at one point today we reported that republicans called the office of vice president joe biden to get things going because they couldn't get anything going with the senate. might this be an opportunity for the president to step up? >> well, i think reports -- i'm not in the closed door sessions but i might have been skulking the halls of congress. the report are vice president joe biden is involved and trying

to -- he has successfully talked with senator mcconnell in the past and the good faith discussions are happening. i believe in the innate good of republicans and democrats and the fact we're americans and patriots first and understand what this is going to do to every american if they do not find a solution. every single american's taxes will go up. it's going to hurt the economy. 2 million people will lose unemployment insurance. i believe people are working i good faith. there are significant differences but they have -- i've been around long enough to know there's a lot of time and it can go beyond midnight. the new congress does not come in until thursday afternoon. we've got a couple of days. >> brad, i want to give you 15 more seconds but i have to take a commercial break. sit tight, we're watching capitol hill and we'll bring you the latest as lawmakers struggle to reach a deal to avoid the

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>> this is the fox report. tonight, last minute negotiations in washington right now. we're inside 30 hours from when we all go over the so-called fiscal cliff, if our elected leaders cannot fix the mess they've set into motion. they're hoping for, we understand now, a little divine intervention. >> have mercy upon us as we gather, with so much work left undone. >> well, they've tried everything else. now, praying for a solution to keep americans from feeling the impending higher taxes and keep spending cuts, the senate opening a special sunday session with the chaplain. >> move us and save us from self-inflicted wounds. >> harris: our coverage continues as lawmakers are still at it tonight. and a new video after plane crash that appeared to leave no survivors and the death

toll rising and see the huge airliner cracking. and investigations now point to equipment on board. also, feeling the bite of winter weather, again. the northeast taking the brunt of the new system just as many of you head this way to ring in the new year. your travel forecast. it has all come down to this again. crunch time in our nation's capital, and they could very well hang in the balance, and talks of the fiscal cliff are continuing to play out after hit ago major setback, and we found out this afternoon, and what they're negotiating will affect for truly every single american tax hikes, that will take money out of millions of paychecks, unemployment benefits that could suddenly dry up, for millions of people, still looking for work. and deep spending cuts, that could hurt our military.

with so much at stake, it's hard it's left to the last minute, but it has. the stakes high, time short, even now, some lawmakers are expressing some optimism that a deal could be made. and following it with us be, on the hill. mike, it sounds like there won't be a vote at this point because there's no deal at least on the senate side. >> well, that's right, harris. senate majority leader told us we should talk about progress, and earlier the democrats cried foul when the republicans suggested changing the way inflation was calculated on programs like social security. reid offered this reaction late in the day. >> i was really gratified to hear republican demand for social security benefit cuts off the table, truth is they never should have been on the table to begin with. there's still significant differences between the two

sides, but negotiations continue. there's still time left to reach an agreement and we intend to continue negotiations. >> reporter: meanwhile, in the past few months, west virginia's joe manchin, the calm act, trying to soften the blow if the countries goes off the fiscal cliff. it would phase in massive tax hikes over three years and it would call on the office of management and budget to prioritize the spending cuts. manchin says he's frustrated and trying to do something, harris. >> harris: i was reading that as it was crossing the associated press wires. it sounds like more than frustration, it sounds more like desperation as they're losing hope. the changed cpi, social security adjustment, which basically changes the way they con figure the cost of living and will make the benefits smaller checks. does it sound like the republicans are willing to let that go? >> reporter: it seems like they're willing to let that go. senator mcconnell, the republican negotiator essentially said, no stumbling

block should cut off this deal. so, when the democrats protested, republicans said, fine, we'll take it off the table, but it just seems like the talks between reid and republicans got stuck and so they called the bullpen, and mcconnell called an old senate colleague, vice-president joe biden. >> we're willing to work with whoever will help. there's no single issue that appears to be a sticking point. the sticking point appears to be willingness or interest or frankly the courage to close the deal. >> top aides on the republican side sound hopeful because they believe vice-president biden can cut a deal. but it may not be tonight, harris. >> harris: mike emanuel, thank you very much. let's turn now to the white house, president obama putting pressure on the lawmakers to make a deal. talking about the fiscal cliff in a television interview. he put much of the blame on the shoulders of republicans if no deal is reached, the

g.o.p. firing back saying the president should lead right now not cast blame. chief white house correspondent ed henry is live from the white house, ed? >> you're right, republicans were frustrated by the president going on the sunday talk show today in the middle of all of these negotiations, he's not been on one of these programs since 2009, over years ago. he felt like though it was important to get his message out there and you're right, that he was pounding that same message again and again, if we go off the fiscal cliff, he believes the onus is on the republicans for not meeting him halfway. take a listen. >> not because democrats and congress don't want to go ahead and cooperate, but because i think it's been very hard for speaker boehner and republican leader mcconnell to accept the fact that taxes on the wealthiest americans should go up a little bit as part of the overall deficit reduction package. if folks can't say yes to good offers, then i also have an obligation to the american people to make sure that the

entire burden of deficit reduction doesn't fall on the seniors who are relying on medicare. >> reporter: now, republicans are expressing frustration by saying, look, the president is trying it it put the blame on them for the potential for going off the cliff, but when senator mitch mcconnell started coming into the negotiations, mcconnell says it's the first time he's got a call from the president or senator reid or any of the top democrats to talk about the fiscal cliff in about a month and they feel like the president has not gone the extra mile, harris. >> harris: the vice-president getting the call to get involved today. what do they make of all of that? >> that could be a big deal because it shows on the white house pushback to the republican charge the president hasn't done enough. they're going to say, look, he's been pulling out the stops including bringing in the vice-president who had been in delaware this weekend, came to the white house here today. working the phones, we're now told he's had multiple conversations with senator mcconnell, and that's significant because a year and a half ago when they had at

that big dispute about raising the debt ceiling and completely stuck just like they are now, it was joe biden as a former senator and unstuck everything and in fact, joe biden got a nickname from top white house aides here as the mcconnell whisperer as if he had a magic potion to cut through the noise and we'll see if the whisperer comes back and we'll get sort of-- >> any kind of a whisper to get a deal. there's been so much shouting, maybe a whisper will help bring it together, harris. >> harris: i like that, the flip side. ed henry, thank you very much. >> reporter: good to see you. >> harris: we're only hours away from the markets hoping now for what will be the final trading day of 2012. and wall street is watching washington very carefully. not only because of the fiscal cliff fight, but because of another potential crisis looming in the wings. remember this? our nation's enormous debt. joining me now again, gerri

willis, anchor of the willis report on the fox business network. you know, i followed something called the debt tally on twitter and it shows you that it changes every second or so, and not in a good way, all day long. we learned last week from treasury secretary timothy geithner that we could hit our debt ceiling on tuesday. the perfect storm, fiscal cliff, debt ceiling. what exactly is the debt ceiling? >> well, we're only allowed to borrow so much without asking congress for a higher debt ceiling. in other words, every time the president wants to spends more money, he has to go to congress and ask for authorization and that's the way it works, to have the people elected approve spending increases. right now, 16 trillion dollars in debt, we're bumping our head on the debt ceiling right this very minute and let me tell you, when you look the at how much money we're spending compared to our gdp, we're similar to spain, we're similar to greece, it's not a pretty scenario. >> harris: well, tell me this:

what actually happens when we nudge up against it? >> well, everybody starts wondering when they're going to rise the debt ceiling, there's big pressure on republicans in congress to approve that. it's a big debate with them because they don't like to and then you have all of wall street looking at this, wondering whether we're going to be able to pay our bills and remember what happened last time around, the markets sold off 2000 points over a two month period. it was very dramatic. and really hurt people's 401(k)'s. >> harris: well, if you can't pay your bills you get a downgrade and we've seen that we could get our credit downgraded. >> again, again, that's the not good news. because you know what happens when you have a low credit rating, you can't borrow as much money. >> harris: that's what happens-- it costs you more to borrow and that's the trouble with that and all this have coming together, it could be, it could be a tough open for the new york stock exchange tomorrow morning. we'll be watching closely. none of this comes as a surprise to professional

traders who have been watching this for weeks, with selloffs in the market every single day last week, so they know what's happening, know what's going on. it's not a surprise, but nobody likes to see it when we're having troubles with the debt ceiling. >> harris: before i let you go. a really basic question. when they raise the debt ceiling is that to pay off debt we've accrued or to give us more to spend on more stuff. >> now that 15 trillion dollars in debt we have, that's money out the door, that's spent, money we've spent on other things, some time ago, we built it up over a period of time so we're not talking about money that's going to be spent tomorrow. we're talking about money that's already out of our pocket. >> harris: wow. okay. i call it the perfect storm. i'm sure you have a much fancier term for it. >> well, that works, i got to tell you. >> harris: gerri willis, thank you very much. catch gerri willis week nights 6 p.m. eastern on fox business network. we appreciate your time. and right now, the fiscal

cliff hanging over the nation, you've heard gerri talk about it, we'll see the deadline, will it happen less than 29 hours away. we'll talk with a lawmaker who thinks the president wants -- wants to go over the fiscal cliff. why? i'll ask him. [ male announcer ] this is sheldo whose long day setting up the news starts with arthritis pain and a choice. take tylenol or take aleve, the #1 recommended pain reliever by orthopedic doctors. just two aleve can keep pain away all day. back to the news.

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we've learned about five people killed in a charter bus crash on an icy interstate in oregon. these weather systems are something that we have been watching tonight. state police are telling us that 20 others were injured when the vehicle crashed through a guardrail and traveled down an embankment. some of the injured taken to local hospitals while others were treated there and there will be an investigation and we'll bring you pictures as they come into the news room as well. new developments regarding a fatal plane crash in russia. new video surfacing of the airliner as it careened off the runway and on to a highway in moscow yesterday. the impact sending debris flying into oncoming traffic, including aed into a car. no passengers were on board at the time only crew members and the death toll risen to five after a flight attendant. the remaining three survivors listed in mythical or serious condition.

hospitalized tonight. no injuries listed of people on the ground. including that car. and investigators are trying it determine what went wrong and one official is looking at faulty brakes to blame for the crash. two teenagers injured at a stabbing in a shopping mall in california at least one of them undergoing surgery the at a local hospital right now. and police responding to the scene late last night to find the victims on the third floor of a movie theater. it was chaos in the search for the suspect. >> they had us all in a line exiting, police caution tape. >> and police were shopping every vehicle and shining flashlights, opening trunks and checking everyone leaving the parking garage. >> investigators say a search for a suspect continues now, although they lack the details on the attacker's physical description and they don't know why the person did this.

and hundreds of people gathering to say goodbye to one of the firefighters shot and killed in the ambush on upstate new york on christmas eve. holding back tears at the funeral for wes webster, a volunteer firefighter, mike, he and a firefighter were shot and killed while responding to a house fire. two other firefighters wounded in that. before the shooting, william spankler, jr. was spot and killed by police, i should say after. and he was a convicted murderer and set a trap for the first responders and then shot them as they were trying to put out the fire. holiday travelers running into an electorate of problems this weekend after two powerful winter storms swept across the nation. people across the country still dealing with that and now we're looking ahead to new year's eve. your holiday forecast is coming up. first, we go back to washington, capitol hill and talk with a republican lawmaker where negotiations stand right now.

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>> the he questions buzzing around washington and frankly the nation tonight, will a deal get done on the fiscal cliff. negotiations continuing behind closed doors to avoid some of the the most painful tax hikes and spending cuts in our nation's history. at least one republican congressman believes the president really wants the nation to go over the cliff, he so tax rates can rise. joining me now for his take on what's going on, live from the hill right now, house budget committee member, republican south carolina congressman mick mullvaney. thank you for being with us. >> thanks for having me.

>> harris: this would be quite an acting job if he really in the end wants us to go off the cliff. >> politicians are good actors. and not only the last couple months, but years, his omb, budget, the money necessary to run the programs he wanted and nancy pelosi tells me there are members in her caucus wants taxes to go up and howard dean not shy saying that taxes should go up on everyone for months. there's a major part of the democrats who want the rates to go up and are public about it. the question, does the president have the interest to stand town that part of the party or does he want taxes to go up and blame the republican. >> harris: first time since 1970 congress is working between christmas and new years.

how do you negotiate with someone who is determined basically to see is fail and see us go over into extreme high taxes? >> we don't and one of the most insightful things i've read in the the last couple of weeks, the dialog between mr. boehner and the president off the election and mr. boehner put 800 billion of revenues on the table and talking about negotiations and the president says i get that for free, i'm not giving you anything for 800 billion dollars. and washington is a rumor mill, as you can probably mante imagine, and we've heard that the change cpi would be off the table, an indication of a smaller deal, not a larger deal, and it's hard to imagine a larger deal without including those. and things are moving quickly despite the fact it seems fairly quiet on capitol hill. >> harris: we're edging later and later on this sunday night

and talk about things that have been said that can shift the temperature of where you are. senator reid has said he cannot offer a counter offer because he says, quote, we're too far apart on some pretty big issues. what's he talking about? >> i don't know, the first i've heard. when people tells they don't want a counter offer, it tells they don't want to deal. it strikes me it would not be difficult to focus just on the tax rates. i think what you might be seeing out of mr. reid and others across the aisle, they're not interested in doing something on the tax rates and not that interested in the tax rates and staying down with the interest and what they can get as part after deal. you saw the president asked for 50 billion dollars in stimulus and extension of unemployment insurance and the question what leverage can they get, not whether or not they're interested in the tax rates staying where they are. >> i'm curious, a little like shopping on christmas eve and

the stores are about to close. do you get the gift and get everybody out of harm's way? >> we'd like to get as many out of harm's way as they can. of course the house cannot do things by itself. said this for two years, since i've gotten to washington we thought they were inaction and sat on the senate desk, and the senate didn't take up for a vote. so, unfortunately, it looks like what we're going through tonight is more of the same and the senate from what you've told me sound like they're not interested in doing anything. the most disappointing news i've heard all day. >> harris: when america watches the sausage being made and you guyed are used to it. when you look at approval rating or disapproval rating of congress across the country, how does this get left to the last minute. before you speak, congressman, i want everybody to know, you can't see it, a fox news opinion poll that shows at that people feel about congress at all and you're part of that group, 74 disapproving. how do you get to the point

where it's the eve of new year's eve and we don't have a deal on a fiscal cliff? >> i've got three 7th graders back home, we've got triplets and congress is pretty much like having three teenagers in the house, leave everything to the last minute. keep in mind we've known about this for at least 18 months and probably two years and the argument could be made we know it's been coming for ten years and i've seen the president and him saying that rational arguments and i wish he'd listen to his own speeches, he's in a powerful leadership position. the president for goodness's sake, and his party is leading the senate. and if you wanted to highered could be part of a negotiation, if he's not that means the president has refused to engage and i think those actions speak much louder than words. >> harris: talking about your family and i've visited your website, your children are beautiful and a dad, if you're

part of the mix there, tell your teenagers to answer up, would you? . thanks for joining us, sir. >> thank you, happy new year. >> harris: we've been watching the latest from capitol hill and we'll bring you the latest. you heard me delivering bad news and i didn't realize that the congressman didn't realize that harry reid had said and about no deal from the senate. now he'll go into the closed door g.o.p. meeting he was just going to leave our interview to go into and potentially more news before we get off the air if we hear back from him. we'll check in. meanwhile, president obama making new remarks about the terror attack in benghazi, libya, saying we have some quote, good leads on who was behind the attack that killed four americans, including our ambassador to libya. this, as we're learning al-qaeda in yemen is offering a bounty for the murder of another one of our ambassadors. stay with us. share everything.

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and we've been covering on fox news all day, some of the weather systems that move in the northwest. and we knew we had icy conditions there. and some of the injured have been taken to local hospitals and others were treated there in a triage manner at the scene and the the exact cause of this accident is under investigation. but as i mentioned, the roads were pretty treacherous out there due to weather: we'll keep you posted as we learn more on this. i'm harris falkner, this is the fox report, a special edition, two hours tonight, it's the bottom of the hour and time for top of the house. all eyes on our nation's capital will look live now as the fiscal cliff rages on in the fight to come up with some kind of solution. republicans and democrats going back and forth behind closed doors on this sunday after reports of setbacks in negotiations. joining me now for his take on what has gone on now, really, since last night, fox news senior capitol hill producer, chad, good to see you. >> thank you for having me. >> harris: so basically, chad,

we're right back where we started because of this setback and these two sides are now breaking up. they've gone home. >> well, in some respects we're back further than we were. it was very remarkable this afternoon when we heard there was a major setback as they start today talk about this changed cpi, change to the the consumer price index and the way they would calculate it for entitlement benefits. that's very serious, it's almost toxic to democrats and the democrats immediately decried this as a poison pill. and again, just how quickly things have changed throughout the day. democratic senator of maryland says it's like a kaleidoscope, you look one minute and see a picture and a few minutes later, a different picture. sometimes it's a pretty picture, sometimes it's not a very pretty picture, i was struck by opening remarks today when the senate came to session by the senate chaplain barry black. rarely do you hear them sort of get involved in politics and there is so much to do on

the senate floor and said, divine providence, save us from our self-inflicted wounds and this is the opening prayer in the senate so you really understand how testing and close we are to the fiscal cliff. >> harris: we have a little bit of that, if we can cue it up, chad, we'll share it again. as we watched on this sunday, it seemed, well, rather appropriate that the only thing they could agree on is maybe a little divine intervention could help. there's been put forth another bill, i'm curious to ask you about this, i don't know how serious this is if other people are talking about it, but joe manchin, democrat out of west virginia, senator joe manchin has put together what is called the calm act, it's the cliff alevation at the last minute or calm act. and he put that out before the tax hikes and spending cuts get in and determined to make it a softer landing. about?

>> i was sort of told about this sort of off the record, if we got that coming forward. you'll probably see other lawmakers make last ditch attempts, if we're going to go off the cliff, have a parachute, a para sail or something. and he would phase these in over three years. and remember, it takes the irs several weeks, probably into late january before they print up the tax forms for this year coming up in april. so there's some thought even if we actually numberically go off the cliff in the next couple of days, there's still sort of time to do this in january, maybe february, so long as everybody doesn't get hit right away. and there are ways they could put in legislative putty or grout. but they are far from an agreement right now, and that's something that senate majority leader harry reid said just a little bit ago. when asked if there would be an agreement, he said, look, it's up to talks for joe biden and mitch mcconnell.

>> harris: i'm curious, we had on the congressman from south carolina, learning from us, what senator reid had said that there were strong sticking points that they couldn't cobble together a deal on the senate side and he said that's very discouraging, the last couple of seconds. your response? >> yeah, that's what people are saying here, they can't believe they're so close in some respects, but they can't get over that hurdle and it kind of has to start in the senate, the message that the house republican leadership is delivering to its members, saying, look, the senator has to go first, we have passed house republicans, passed bills to deal with the fiscal cliff and deal with the spending cuts and later this year, not much else, not much time we have to sort of get out of this so they're saying, if they can get something through the senate, fine, but if not, it's up to them, they're waiting for the senate at least as far as the house of representatives. >> harris: our senior producer on capitol hill, often we don't get to see him, i can hear voices behind you and

know there are people still on the him and let you get back at it. and if there's breaking news we'll bring you back. >> we think it's going to be pretty dead from this point on. >> harris: 11 a.m. eastern tomorrow is when we expected to pick back up again with official leaders going back to the hill. some new information coming out now about the terror attack in benghazi. according to president obama, the united states has some very good leads on who carried out that deadly assault at the consulate in libya killed four americans, as you know, including our ambassador to libya, christopher stevens. mr. obama remarking on the investigation into what happened during an interview that aired earlier. >> there was just some sloppiness, not intentional, in terms of how we secure embassies in areas where you essentially don't have governments that have a lot of capacity to protect those embassies. >> harris: we're getting a lot

of reaction from those remarks to the president. chief white house correspondent ed henry is live for us from the white house. ed, the president was pressed today about benghazi, what did he say? >> you heard a little, but also pressed on whether or not he did enough to support susan rice, who had been talked about as a potential nominee as secretary of state, and pulled back after the criticism of what she had said on those sunday talk shows, where critics were suggesting she was misleading the american public about whether this was a spontaneous reaction to that anti-muslim video, whether it was a terror attack. the president dismissed all of that, in his words, he said politically motivated attacks against susan rice and the the rest of the administration and then he went on to say this about the investigation. >> with respect to who carried it out, that's an ongoing investigation. the fbi has sent individuals to libya repeatedly. we have some very good leads, but this is not something that you know, i'm going to be at liberty to talk about right

now. >> reporter: now, you mentioned the reaction, the fact that the president said we've got some pretty good leads into who did this whether it's al-qaeda or some other terrorist group. frustration from the republican said they've already been attacking the president about this for a long time, but now saying after four months we just have good leads and doesn't appear we've made progress in terms. criminal investigation into who killed these four americans here. >> harris: i know the timing of this getting answers has been so delayed. critics are not happy and it sounds like republicans are not satisfied with the actual answers themselves? >> they're not. let's also remember when the state department put out a report, the accountability review board, about what went wrong in benghazi, there were initial reports suggesting that some state department officials have resigned, we've since heard-- they weren't resigned, they

were reassigned and suggesting they weren't punished that severely. >> i thought the other thing in the president's statement that was absolutely stunning was that attention to security at the benghazi facility was sloppy. right, four dead americans. this is a tragedy. >> reporter: you can tell from the president's remarks he obviously wants to move on. you hear from mr. bolten's remarks, there are a lot of republicans who still have unanswered questions about this. i think the next big thing here is when mr. secretary of state clinton testify. she's been ill, as you know. she couldn't testify on the hill when that accountability review board came out with their report. she has vowed that she will testify so we expect earlier in the new year she will do that, harris. >> a little news on that today. the senior senator from california dianne feinstein,

she expected her to testify. we'll have to see. ed henry, thank you. fox news alert, it's about weather. the northeast digging out after the second winter storm in less tan a week. southern new england hardest hit by the latest round with up to a foot of snow reported there. nearly five inches falling across pennsylvania and officials imposed a 45 mile per hour speed limit on the pennsylvania turnpike. many passengers travelling between the christmas and new years holiday find themselves stranded, again. accord to go flight stats.com, about a hundred flights canceled today alone, more than 1500 have been delayed. and it's the one-two punch was not enough, bitterly cold temperatures are now moving into the region and i mean cold. it's going to feel like winter. accu-weather meteorologist jim dickey to tell us more, jim? >> yeah, good evening, harris, this storm incredible yelled. rapidly striking its way up the coast and brought a swath

of snow. and up to 20 inches from the storm and now across the region, not much to look at, but it isn't telling the full story and the pressure off the coast, and bringing in cold air and gusty winds. when you factor in the wind, the real-feel, minus 2 in portland and temperatures will fall here, cold ones, especially in new england and fall to 5 in burlington, down to a cold 9 in portland. like you said, winter is here to stay and of course, we're already looking for our next snowstorm here and new year's eve watching a large system drift out of the four corners out of the southern tier of the rockies, bringing soaking rain across the lower mississippi valley and a swath of snow from the central and southern plains into the ohio valley and not the snow maker we just saw or the predecessor of that storm either. still, decent snow in some spots and especially into kansas through the afternoon, through the morning here, and that's a spark, one to two

inches generally, a few spots, four, five inches not out of the question and an icy mix farther southward and southern missouri and that soaking rain like i said further southward across the lower mississippi valley. an active pattern here and cold in the northeast into new england as well. >> jim dickey accu-weather, we appreciate the update, now, this just coming into our news room and i want to share it with you. capitol hill now, this is from mike emanuel, they walk away and stuff is happening. he's sending this out now, an aide to senator mitch mcconnell told our mic that there have been multiple phone calls between vice-president joe biden and they are still continuing this evening, they're still talking back and forth. an aide to senator harry reid said the majority leader has left the capital, left the capital. no deal from the senate side. can't come up with a deal from the senate side, democrats not able to get together on something as a counter offer. we're inside 30 hours.

okay. that's where we stand as news continues to break we'll bring it to you. some states are doing well in the bad economy that we've been feeling for years now, raking in billions in lotto ticket sales this year. a look at what's behind that boom and why some say, spending your hard earned cash on a ticket, well, it really isn't worth it. [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. yes, you could. with a new project in mind, some how-to knowledge to give us an new years clutter is no match for someone with big ideas. edge, and more savings down every aisle.

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according to the experts that has a lot to do with the state of the economy. >> are you going to walk away with it? let's find out. even when times are tough, lotteries rake in the dough. >> during bad times people want to have hopes and dreams and apparently are living it out through the lottery. >> they saw lotto sales jump in 2011, up from 2010. >> we respond by thinking of it as just a fun diversion, a fun recreational activity, a fun way to give flight to our imagination what we might do if we want a million dollars. >> and states see it as a way to supplement lost tax revenue. >> won? yes, whoo! >> in california has the nation's third highest unemployment rate, lottery sales are up 20%. >> the million dollar raffle is back. >> and rhode island's gamblers dumped more in 2012 even as the state's jobless rate

climbed it to number two. why the trend when we know the odds aren't in our favor? >> you're about a hundred times more likely to die from a flesh eating virus. >> there's no chance if you don't play and it's that hope of instant wealth that keeps people coming back for more even though some experts caution against it. >> the best thing to hang on to your dollar, instead of buying a lottery ticket. >> most financial advisors will tell you they don't have anything against the lottery per se, they just suggest looking at it as a recreational expense, not an investment strategy. good advice. harris. >> harris: clauda, thank you very much. the fiscal cliff deadline is getting closer and closer, if lawmakers fail to reach a deal in time, our nation's top employers, the small businesses in our communities, will have some difficult decisions to make, with 2013, will it bring more economic opportunities or will the job market contract? stay with us. [ rosa ] i'm rosa and i quit smoking with chantix.

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>> the looming fiscal cliff is leaving many small businesses in limbo in this country. some owners say uncertainty over potential tax hikes is keeping them from expanding and hiring new employees and analysts warn, that's a recipe for disaster in this already sluggish economy. anna kooiman joins us with more. many small businesses owners say they're kind of operating on the defensive right now. >> it's tough to plan. they're making decisions based on business coming in and the risk of losing it all. arthur cooper is concerned that the change in tax rates will hurt his ability to hire so he doesn't want to expand. >> when you don't know what the rules are, all right? and that's-- it's hard to be aggressive and it's hard to--

it's hard to be really resolute and you know, in your business planning. >> and barbara says she and her husband own an architecture firm and are worried if congress agrees to raise taxes on people in their income bracket, the company will suffer as they try to make up the the difference in salary increases. >> i don't want to lay anyone off there are 12 people who work here and they all have children and you feel a little bit responsible for them. i know i'm not supposed to do that, but i can't separate myself from the rest of them and their lives. >> and economists say businesses are postponing purchases like equipment or merchandise until decisions are made by congress. >> you know, it's interesting the way she describes it. one of the reasons that people love working at small businesses, because they're a family. >> harris: we're thinking the same thing. and congress says the problem is actually two fold. >> 100 million americans are

looking at tax increases as well and they are the consumers who buy the products from the small businesses. >> if you take more money out of the pockets of consumers and send it to washington, guess what? these less money they have to buy the products and services that small businesses provide in this countries. >> economists also say the shock of less spending could be all it takes, harris, of course, to push the country back into recession which nobody wants. >> harris: anna, thank you, good to see you tonight. well, you've heard about black friday, you know, happens around thanksgiving time and that's when people shop for christmas. well, in the nfl, they have black monday when teams go shopping for coaches. pete joins us next to tell us who is getting the boot. he's got the skinny. can be. for fast, long lasting relief, use doctor recommended gaviscon®. only gaviscon® forms a protective barrier that helps block stomach acid from splashing up- relieving the pain quickly. try fast, long lasting gaviscon®. with less chronic osteoarthritis pain.

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>> and we have breaking news again on fox report. we are learning from the associated press, fox news is working to confirm this, secretary of state hillary clinton has been admitted to the hospital with a blood clot following her concussion. remember, she's been sick for a couple of weeks, she was due to testify on capitol hill about the terror attack on the u.s. consulate in benghazi, libya. that got delayed because of her concussion illness, first told food poisoning and concussion and now the associated press reporting secretary of state hillary clinton has been admitted to the hospital with a blood clot following her recent illness. as we learn more details and firm this up for ourselves

here at fox news, via our journalists, we will bring you the update. a lot of happening on this hour of fox report. we'll move on now with what is planned. the final weekend of the nfl season and it did not disappoint. peter slegr of fox sports.com is here. and adrian peterson had a huge night, this is a typical rivalry. a state thing, green bay and minnesota. >> and a playoff on the lines for the vikings, they win on a last second field goal by the rookie walsh. and they'll play in the wild card round, the game of the year in the nfl and anybody watching could attest to that, a fantastically played football team and winner of the cowboys and redskins will play seahawks. and afc, texans playing the bengals and ravens hosting colts in their game. >> harris: this season cooked along. indianapolis their coach

coming back after a health scare. >> yeah, chuck pagano came back after a leukemia scare. and inspired win by the colts. beat the houston texans essentially knocking the texans out of home field advantage. and afterwards chuck pagano was dancing. and i talked about black friday, and now it's shopping for coaches. >> it's turner will no longer be in san diego and the eagles coach and shermer is going to be in cleveland. i'm hearing, this is crazy, up to ten coaches may lose their jobs. >> harris: really? >> tomorrow, happy new year. >> harris: wow, no doubt. can you give us an idea, can you give us the scoop? >> the scoop, we are going to see rex ryan with the jets had a rough season and have a press conference at 4:45. word is he